A Few White Papers
you are currently viewing::White Paper-Monetary Policy Predicts Currency MovementsFebruary 9, 2025--Abstract
Archived data, known by currency traders at the time, estimates central bank restrictiveness as a scaling of the residual from out-of-sample panel regressions of M1 on macroeconomic variables tied to domestic and international transaction requirements. Carry's ability to forecast currency returns is subsumed by the central bank restrictiveness signal, which also forecasts inflation. Source: ssrn.com |
Could Digital Currencies Lead to the Disappearance of Cash from the Market?
March 21, 2025-Summary
Private and public agents' plans and actions to introduce digital currencies and other innovative payment instruments could produce some unintended consequences, including the potential disappearance of physical cash. This study employs a two-sided market model to examine how payment systems might respond to new currencies.
IMF Note-Fund Investor Types and Bond Market Volatility
March 12, 2025-Summary
This note explores the connection between the varied investor profiles of exchange-traded funds (ETFs) and open-ended mutual funds (OEMFs) and the return volatility of the securities they hold. Based on the security-level data of US ETF and OEMF holdings, the analysis suggests that, on aggregate, a higher ETF ownership share may be associated with lower bond return volatility.
IMF Working Paper-Not all Housing Cycles are Created Equal: Macroeconomic Consequences of Housing Booms
February 28, 2025-Summary
Summary
This paper shows that not all housing price cycles are alike. The nature of the housing expansion phase-especially whether a housing price boom characterized by rapid and persistent house price growth is present-plays a key role in shaping the severity of the subsequent contraction, and the net macroeconomic impact over the full cycle.
Pension Reform and Stock Market Development
February 28, 2025-Summary
We highlight the strong connection between developing fully-funded, individually-owned, collectively-managed, mandatory/incentivized (FICMI) pension schemes and the development of domestic stock markets. We do so by building a stylized model and complementing the analysis with cross-country empirical analysis and case studies.
IMF Working Paper-Understanding the Macroeconomic Effects of Natural Disasters
February 21, 2025-Summary
Climate change is causing more frequent and devastating natural disasters. The goal of this paper is two-fold. First, it examines the dynamic effects of natural disasters on the growth of output and its components. Government expenditure in advanced economies (AEs) rises immediately in the same year of the natural disaster, offsetting the decline in private investment growth and thereby mitigating the negative effect on output growth.
IMF Working Paper-Prometheus Unbound: What Makes Fintech Grow?
February 21, 2025-Summary
The rise of financial technologies-fintech-could have transformative effects on the financial landscape, expanding the reach of services beyond the confines of geography and creating new competitive sources of finance for households and firms. But what makes fintech grow? Why do some countries have more financial innovation than others?
Social Security Reforms, Retirement and Sectoral Decisions
January 31, 2025--Summary
In many countries, the regulations governing pension systems, hiring procedures, and job contracts differ between the public and private sectors. Public sector employees tend to have longer tenures and higher wages compared to workers in the private sector.
As such, social security reforms can affect both retirement decisions and sectoral choices. We study the effects of social security reforms on retirement and sectoral behavior in an economy with multiple pension systems.
IMF Working Paper-Tokenization and Financial Market Inefficiencies
January 29, 2025--Summary
Most financial assets are digital today. Tomorrow, they may be tokenized. Tokenization implies recording and transferring assets on a widely shared and trusted digital ledger that can be programmed. Interest in tokenization is strong and experiments abound, but what are the consequences of this new trend for financial markets?
IMF Working paper-Long-Term Debt and Short-Term Rates: Fixed-Rate Mortgages and Monetary Transmission
January 24, 2016--Summary
We study the two-way relationship between fixed-rate mortgages (FRMs) and monetary policy in a panel of up to 35 countries over the last two decades. The dataset includes quarterly information on the composition of mortgage flows and stock by type of rate-fixation and monetary policy shocks cleaned of information effects.
Spillovers from Large Emerging Economies: How Dominant Is China?
January 24, 2016--Summary
This paper investigates the global economic spillovers emanating from G20 emerging markets (G20-EMs), with a particular emphasis on the comparative influence of China. Employing a Bayesian Global Vector Autoregression (GVAR) model, we assess the impacts of both demand-side and supply-side shocks across 63 countries, capturing the nuanced dynamics of global economic interactions. Our findings reveal that China's contribution to global economic spillovers significantly overshadows that of other G20-EMs.